FTB, COT Q&A: Taxation Committee gets updates and some answers.

• Author: English, Damien B. M.
• Position: CATax

Legislation, auditing updates and communication methods were just some of the topics tackled at the Oct. 27 CalCPA Committee on Taxation/FTB annual liaison meeting. A transcript of the questions submitted by CalCPA members and respective answers from the FTB will be available in late January at www.calcpa.org/tax.

Legislative Rundown

The following are highlights of Assistant Bureau Director Patrice Gau-Johnson's presentation of FTB sponsored legislation. Complete legislative analysis for each of the following bills can be found at www.fib.ca.gov/law/legis/.

AB 2177: Authorizes the FTB to implement an alternative communication method that, at the request of the taxpayer or the taxpayer's authorized representative, allows specified electronic communications between the FTB and the taxpayer. It requires the FTB to advise the taxpayer or representative of the ramifications of electing to receive notifications from the FIB in the manner selected and/or failing to take appropriate action in response to those notifications prior to the use of the alternative communication method.

[ILLUSTRATION OMITTED]

SB 1492: As it pertains to voluntary disclosure agreements (VDAs), this act:

* Allows taxpayers to file the current year tax return as late as the extended clue date;

* Eliminates the underpayment of estimated tax penalty when imposed because the VDA is signed after the quarterly tax payment due date; and

* Allows VDA applicants requesting an installment payment arrangement additional time to satisfy the agreement if the payment arrangement request is denied after the installment payment agreement period ends.

Some notable budget trailer bills discussed included:

SB 401: This Federal Conformity Act:

* Changes California's specified date of conformity to federal income tax law from Jan. 1, 2005, to Jan. 1, 2010, and thereby in general, conforms to the numerous changes that were made to federal income tax law during that four-year period; and

* Conforms to the Feb. 17, 2009, federal legislation providing an exclusion from gross income in any taxable year for energy grants provided in lieu of federal energy tax credits.

SB 858:

* Allows for the reporting of use tax on income tax returns.

* Makes the federal disaster NOL carryback rules inapplicable for slate purposes, delays the operative date for NOL carrybacks and suspends NOL deductions for two years.

* Modifies the large corporate understatement penalty.

* Clarifies one aspect of the bright-line...